ECONOMY

Government-linked Calik secures significant Turkish media assets

ISTANBUL – An energy-to-construction conglomerate with close links to Turkey’s ruling party won the auction for the country’s second-largest media firm ATV-Sabah, paying the minimum price as the lone bidder. Unlisted Calik Holding, which is headed by Prime Minister Recep Tayyip Erdogan’s son-in-law Berat Albayrak, succeeded with an offer of $1.1 billion, Fethi Calik, chairman of the tender board of state Savings Deposits and Insurance Fund (TMSF), said yesterday. Fethi Calik, who has no connection to the Calik group, said the full TMSF board had still to approve the deal. The sale of some of Turkey’s most attractive media brands had been expected to draw strong demand but several foreign firms that initially showed interest dropped out. ATV-Sabah is a new entity comprising assets the TMSF seized from unlisted conglomerate Ciner Group in April, saying irregularities had come to light. Sabah is a leading daily and ATV a high-rated entertainment channel. Bankers and analysts said a law restricting foreign ownership of broadcasters to 25 percent – forcing foreign firms to seek local partners – was the main reason for the lack of interest in the auction. The ruling Justice and Development Party (AKP) tried to change the law in 2005 but the bill was vetoed by the then president. It has not come back on to the agenda since the AKP was re-elected in July and put a former senior party member in the presidential palace. Media balance «The eventual acquisition of the ATV-Sabah media group by Calik is likely to be seen as changing the balance of power in Turkey’s influential media sector in favor of the AKP, a further sign of the party’s determination to cement its hold on power,» said Wolfango Piccoli, Turkey expert at the London-based political risk consultancy Eurasia Group. The lower-than-expected price was bad news for the media sector, which is suffering from profit-damaging competition, one analyst said. «A higher price and an international player, pointing to a more profit-driven approach (would have been more positive for the sector),» said one media analyst who asked not to be named. «If the price were higher, the motivation for chasing profit would have been greater,» he said. The media sector is dominated by Dogan Yayin, owned by family-run conglomerate Dogan Holding. Other listed media companies include Hurriyet Gazetecilik and Dogan Gazetecilik, both part of the Dogan empire. The third-largest player is unlisted Cukurova. Shares in Dogan Yayin rose 1 percent yesterday, underperforming the main index’s 2.3 percent rise. TMSF had said there was no legal reason for the tender not to be held with one bidder, but some analysts said it could still be canceled. Calik’s wholly owned unit Turkuaz bid without partners and did not plan to seek any, legal adviser Serhat Demir said. The Turkish market is attractive because of a large and fast-growing population and economic growth averaging 7 percent. Europe’s largest commercial broadcaster, RTL Group, had planned to bid with Turkish partners but pulled out this week as it said it needed more time. Another grouping of Carlyle Group and Turkish Nurol also withdrew, after a source familiar with the matter said it too sought more time. A TMSF official said in September that RTL, News Corp, Germany’s ProSiebenSat.1, Prague-listed CME and Greek broadcaster Antenna TV had purchased tender documents.